The majority of federal expenditures is spent on
A. National Defense.
B. Income transfers.
C. Public sector purchases of goods and services.
D. Private sector purchases of goods and services.
Answer: B
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To make child daycare more affordable, government advisors are debating two possible options. Plan A is to give daycare centers a $100 subsidy per month per child. Plan B is to give the parents $100 reduction in taxes per month per child in daycare. Which plan benefits parents more?
a. Plan A because it will increase the supply of childcare and decrease the price. b. Plan B because the $100 goes directly to the parents. c. The plans are equivalent in terms of their impact on the price minus subsidy paid by parents. d. Plan A because the price will fall, while under Plan B the price will rise.
A bond's price and its yield to maturity are inversely related because
A) discounting future payments at a higher rate reduces the present value of the payments. B) discounting future payments at a higher rate increases the present value of the payments. C) an increase in the yield to maturity will lower a bond's coupon rate and hence its price. D) a fall in a bond's price will lower its par value and hence its yield to maturity.
Arguably the simplest voting system is:
A. instant runoff voting. B. pair-wise majority voting. C. first-past-the-post voting. D. approval voting.
The burden of a tax will fall primarily on sellers when the
a. demand for the product is highly inelastic and the supply is relatively elastic. b. demand for the product is highly elastic and the supply is relatively inelastic. c. tax is legally (statutorily) imposed on the seller of the product. d. tax is legally (statutorily) imposed on the buyer of the product.